MONITORING POVERTY
AND SOCIAL EXCLUSION
IN SCOTLAND 2013
This Findings from the New Policy Institute analyses the latest data
on poverty and exclusion in Scotland. It shows changes over the last
decade, and highlights the big challenges ahead.
Key points
• In the decade to 2010/11, the child poverty rate in Scotland fell from 31% to 21% after housing
costs (AHC). From having a higher rate than England and Wales, Scotland now has a much lower
rate.
• Over the same period, the number of working-age adults with dependent children living in poverty
fell, while the number without dependent children rose.
• Since 2008, the number of under-25s who are unemployed has almost doubled to 90,000. They
are the only age group for whom unemployment has grown in the last two years.
• The number of people working part-time who want a full-time job has risen from 70,000 in 2008
to 120,000 in 2012. This has led to a rise in the number of people working part-time, while the
number working full-time has fallen.
• Over the last decade, the proportion of people claiming an out-of-work benefit has fallen across
Scotland from 17% to 15%. The largest falls were in Glasgow and its surrounding areas, where the
rate was and remains highest, now standing at 22%.
• Health inequalities in Scotland are not only stark but growing. A boy born in the poorest tenth
of areas can expect to live 14 years less than one born in the least deprived tenth. For girls, the
difference is eight years.
• Rates of mortality for heart disease (100 per 100,000 people aged under 75) are twice as high in
deprived areas as the Scottish average.
• Cancer mortality rates in the poorest areas (200 per 100,000) are 50% higher than average, and
have not fallen in the last decade, while the average has fallen by one-sixth.
The research
By a team at the New Policy Institute
JANUARY 2013
Low income
The most common measure of poverty is based on household income. A household is said to be in
poverty if its income, after taxes, is less than 60% of the UK median for that year.
This threshold is adjusted for household size and composition. It can also be measured before housing
costs are deducted from income (BHC), or after their deduction (AHC). The latter measure is preferred
here, as housing is an essential, unavoidable cost. Moreover, the BHC measure includes housing
benefits, which are not disposable income – they must be paid to landlords, whether private or social.
The most recent data available is for 2010/11, which only covers the first year of the Coalition
Government in Westminster. In that year, the poverty threshold was £215 a week for a couple with
no children, £125 for a single adult, £301 for a couple with two young children and £211 for a lone
parent with two young children.
Figure 1 – Child poverty over time in Scotland compared with England and Wales
Proportion of children in households with incomes
below 60 per cent of UK median (per cent)
Scotland AHC rate
England and Wales AHC rate
Scotland BHC rate
England and Wales BHC rate
35
30
25
20
15
10
5
0
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
Source: Households Below Average Income, DWP
Over the last decade, child poverty in Scotland has fallen on both BHC and AHC measures. On the
AHC measure, child poverty fell in Scotland too, and by much more than in England and Wales. As a
result, the AHC child poverty rate in Scotland is now, at 21%, seven percentage points lower than the
rest of Great Britain. A decade ago, the rate in Scotland was one percentage point higher.
This difference is mainly due to the high and rising cost of housing in England and Wales, and
particularly the south of England. Among those in the bottom half of the income distribution,
housing costs are 25% higher in England and Wales than Scotland. A decade ago the gap was 10%,
so Scotland’s lower housing costs help to keep poverty down.
The fall in child poverty in the most recent year may seem surprising, coming during a period of high
unemployment. In fact, the reason why child poverty fell across the UK in 2010/11 was because the
median income, against which it is measured, had itself fallen. In the UK, median income fell from £373
to £358, after taking account of inflation and housing costs. In Scotland, the fall was from £393 to
£370. Any fall in poverty under such circumstances is limited cause for celebration.
Figure 2 – The number of adults in low income in Scotland over time
Number of people in low-income households
after housing costs (thousands)
Average 1998/99 to 2000/01
Average 2008/09 to 2010/11
250
200
150
100
50
0
In working families
In workless families
In working families
Working-age adults with children
In workless families
Working-age adults without children
Pensioners
Source: Households Below Average Income, DWP
Figure 2 looks at the three years to 2000/2001 in comparison with the three years to 2010/11 using
the after housing costs measure. Over that decade, the make-up of the population of adults in poverty
has changed substantially. First, pensioner poverty has seen a huge fall, from 230,000 to 120,000.
This fall can also be seen elsewhere in the UK.
There is a difference in the trends in poverty between working-age adults with and without dependent
children. Among those with children there was no change in the number living in low-income, working
families (the figure remained at around 130,000), and a fall in the number living in low-income,
workless families from 120,000 to 90,000.
Among those without dependent children, there was a rise in the number living in low-income,
working families from 125,000 to 150,000, and no change in the number in workless families (around
210,000).
Overall this means that the number of working-age adults in poverty remained unchanged over the
decade to 2010/11, but there were changes from workless families to working families and from
those with dependent children to those without.
Work and unemployment
Figure 3 – The number of people unemployed in Scotland by age
Number of people unemployed
(thousands)
16-24
25-34
35-49
50-64
100
90
80
70
60
50
40
30
20
10
0
2005
2006
2007
2008
2009
2010
2011
2012
Source: Labour Market Statistics, ONS
By mid-2012, some 210,000 people in Scotland were unemployed. This represents a rise of 90,000
(80%) since the low point of mid-2008. Almost half of this rise was among those aged under 25.
With the onset of recession in 2008, unemployment rose for all age groups. But since 2010, the only
subsequent rise in unemployment has been among young adults.
By mid-2012, around 90,000 under-25s were unemployed. This amounts to an unemployment rate
(unemployed people as a proportion of those either in work or unemployed) of 21%. The rate for
over‑25s was 6%. Both these figures were almost identical to the equivalent for England and Wales.
Rising unemployment does not tell the full story of the changes in the Scottish labour market since
2008. The total number of people in work is lower, and the mix of part-time and full-time work has
changed too. The total number of people in part-time work rose by 60,000, whereas the number of
people in full-time work fell by 120,000. Moreover, almost the entire rise in part-time work is among
people who say they want a full-time job, from 70,000 to 120,000.
Additionally, the number of people in self-employment has risen from 265,000 to 300,000. Over
the same period, the number of people in employee jobs fell by almost 100,000. All the rise is
among those ’working for themselves’, often people now doing similar work to that which they were
previously employed by someone else to do.
Out-of-work benefits and welfare reform
Figure 4 – Proportion of adults receiving out-of-work benefits by area over time
Proportion of working-age adults claiming
an out-of-work benefit (per cent)
2002 rate
2007 rate
2012 rate
30
25
20
15
10
5
0
North
Edinburgh and Lothian
South
Central
Glasgow and West
Source: DWP tabulation tool for May 2002, February 2007 and February 2012, and ONS mid-year population estimates
Figure 4 shows the proportion of working-age adults claiming one of the key out-of-work benefits –
Jobseeker’s Allowance (JSA), Incapacity Benefit (IB), Employment Support Allowance (ESA) , Income
Support (IS) or Carer’s Allowance (CA).
Over the last decade, there have been falls in the proportion of people claiming out-of-work benefits
across Scotland. The largest falls have been in Glasgow and the West (West Dumbartonshire,
Inverclyde, Renfrewshire and North Ayrshire) where 22% of working-age adults now claim an
out‑of‑work benefit, compared with 25% in 2002. Elsewhere in Scotland, falls have been much
smaller – around one percentage point.
Moreover, since 2007, while there has been no further fall in the proportion of adults claiming these
benefits in Glasgow, there has also not been a rise, whereas in most of the rest of Scotland there has
been a rise.
Looking deeper into these figures, all the fall across Scotland comes from a decline in people receiving
IB or ESA. This fall happened right across the last decade, though it was more pronounced in Glasgow
where the proportion of people receiving these benefits was and is highest. Both in terms of numbers
and rates, there were falls across all age groups.
Since 2007, all areas of Scotland have seen a rise in the proportion of people claiming JSA, but the rise
in Glasgow and the West is offset by the fall in those claiming IB or ESA. This is not true in the rest of
Scotland, hence the different patterns since the onset of recession.
Further reforms to the benefits system may or may not change this pattern, but they will certainly
have an impact on the lives of many people in Scotland. The replacement of Disability Living Allowance
(DLA) with the Personal Independence Payment (PIP), and the ensuing mandated 20% reduction in
caseload will result in around 60,000 working age people in Scotland losing at least some of their
entitlement (Source: Inclusion Scotland). (Welfare reform briefing, October 2012, Inclusion Scotland,
http://www.inclusionscotland.org/reports.asp)
It is estimated that around 65,000 people currently claiming ESA or IB will leave the benefits system
entirely due to a combination of time-limiting the benefit and increased work capability assessments
(Source: Beatty and Fothergill, Incapacity Benefit Reform, the Local Regional and National Impact,
Sheffield Hallam University 2011). Some may find work, and benefit reform as a whole is centred on
improving incentives to do so. For those who do not, the effect is straightforward – lower incomes
and deeper poverty.
Health inequalities
Mortality rates per 100,000 people under 75,
standardised to European standard population
Figure 5 – Health inequalities by area deprivation
Cancer mortality most deprived 15 per cent
Cancer mortality Scotland overall
CHD mortality most deprived 15 per cent
CHD mortality Scotland overall
250
200
150
100
50
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: General Register Office Scotland and Analytical Services (Health), Scottish Government
Figure 5 shows the mortality rates (adjusted for population size and structure) of coronary heart
disease (CHD) and cancer. It compares these rates in the most deprived 15% of areas with the Scottish
average.
Between 2000 and 2009, coronary heart disease mortality rates in the 15% of most deprived areas
fell from around 150 per 100,000 aged under 75 to around 100 per 100,000. In Scotland on
average, they fell from 90 to 50 per 100,000. So the fall was steeper in the more deprived areas,
but the rate is now double the average.
However, this is not true for cancer mortalities. While the average fell from 150 per 100,000 aged
under 75 to 130 per 100,000, the rate in the most deprived areas barely changed at all. The rate of
cancer mortality is now 50% higher in the most deprived areas than the Scottish average.
The difference also exists in overall life expectancy. A boy born in the most deprived 10% of areas has
a life expectancy of 68, eight years below the national average and 14 years below boys in the least
deprived areas. For girls born in the most deprived 10%, life expectancy is 76, four years less than the
national average and eight less than girls in the least deprived 10%.
Compared with 2004 to 06, life expectancy at birth for men has increased by around one year
regardless of deprivation. For women, however, while the average increased by one year, women in
the most deprived 10% of areas only saw an increase of 0.75 years.
Poverty and Scottish independence
From now until the referendum in late 2014, the issue of independence will dominate the Scottish
political landscape. Poverty is currently far from central to the independence debate as it stands but it
is vital that it becomes so. This discussion is, after all, about the kind of country Scotland wants to be
and should cover areas that are central to tackling poverty – health, schools, childcare, benefits, taxes,
work and pay, services, housing and more. The Scottish Government already has powers over many of
these areas.
It is important that the discussion of independence does not obscure the need for policy development
in all these areas to tackle problems that will exist whatever decision the Scottish people take in 2014.
Conclusion
This Findings highlights real and growing problems – rising poverty among working-age adults without
dependent children, rising numbers of people working part-time for want of a full-time job, and high
young adult unemployment. They are problems that cannot wait.
FOR FURTHER INFORMATION
This summary is part of JRF’s research and development programme. The views are those of the authors and not
necessarily those of the JRF. You can download our UK-wide Monitoring poverty and social exclusion 2012 report at
http://www.jrf.org.uk/publications/monitoring-poverty-2012
Read more summaries at www.jrf.org.uk
Other formats available
ISSN 0958–3084
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